Private banks are loosening AUM rules to attract more HNW clients

Mortgage brokers say private banks have started to loosen criteria relating to assets under management in a bid to attract more high net worth borrowers.

Private banks usually seek to attract high net worth borrowers alongside a significant amount of AUM.

For very wealthy individuals, such as those with over £10m in assets, the AUM requirements can be waived as banks seek to build relationships with the aim of future business.

Brokers say the level at which private banks are waiving AUM requirements is now becoming lower as they compete for new business.

Largemortgageloans.com broker Ian Gray says: “There has been a loosening up of AUM requirements.

“Whereas lending is becoming easier on the high street with better rates and criteria, the shift at private banks is to allow loans without as much further investment. Lending criteria is becoming easier and private banks’ appetite is increasing for mortgage lending.”

Gray says the approach between lenders varies, as Singaporean firm United Overseas Bank is being more aggressive while Barclays Wealth is becoming more restrictive.

Mortgage Centre IFA director Fahim Antoniades says: “In the last few years private banks have been so restrictive on AUM but as a result of more competition they have loosened criteria.

“But banks have end of year targets for lending and AUM. When they start hitting their year-end targets they can start to loosen criteria but next year there could be restrictions again.”